Give short answers in just a few sentences) to the following questions: a. (5 points) In a two-period problem, describe

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Give Short Answers In Just A Few Sentences To The Following Questions A 5 Points In A Two Period Problem Describe 1 (159.21 KiB) Viewed 21 times

Give short answers in just a few sentences) to the following questions: a. (5 points) In a two-period problem, describe the effect of an increase in the real interest rate on a consumer's (a consumer who happens to be in a lender position) optimal saving, focusing on the substitution and income effects. N b. (5 points) Discuss the overall effect of a current lump-sum tax cut on desired consumption (and therefore, desired national saving) from a Ricardian equivalence proposition perspective. c. (5 points) What are the sources of long-run growth of output per capita in the Solow model of economic growth? How about the endogenous model? d. (5 points) What are the effects of temporary and permanent income changes on consumption according to the permanent income theory developed by Milton Friedman?